The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

The European payments landscape is witnessing significant transformations driven by technological advancements, the emergence of new players, and regulatory shifts. We recently spoke with Francis De Roeck, who served as a member of the European Payments Council (EPC) Payments Scheme Management Board (PSMB) and has retired from his role at BNP Paribas. We delved into his insights on past, ongoing, and future developments and achievements in European payments and within the EPC.

You have been actively contributing to the EPC’s activities for many years. How has the EPC changed over time?

Indeed, when the EPC was created – now already so many years ago – the first goal was to deliver the three basic schemes (SEPA Credit Transfer (SCT) , SEPA Direct Debit (SDD) Core & Business-to-Business (B2B)). Creating harmonised schemes that could fit all SEPA countries was complicated. Many intermediate versions appeared and were created. When the final versions of the SEPA rulebooks were published, all stakeholders called for a stabilisation period.

However, the need to create real-time credit transfers swiftly appeared. As the SCT Inst scheme was based on the SCT format, the writing of this rulebook was realised in a surprisingly short time frame.

Now we are many years on, and the SEPA schemes are mature and truly stable. The EPC organisation has evolved together with its schemes. From an interbank service that was created as a response to the Lisbon agenda of 2000, it has now become an authority recognised world-wide in ISO20022 payment schemes that are models for many payment initiatives on other continents. This is something of which the EPC can be proud.

What were the most important developments in the European payments landscape over the last five years?

There have been many evolutions. The SEPA schemes became stable and mature. That means it’s now time to revisit them and to enhance them with new surrounding schemes. The EPC created efficient schemes with nice payment transactions, but there was no way to trigger them. So SEPA Request-To-Pay (SRTP) has been developed. Also the SEPA region became so important that – logically – the payments from and to the eurozone needed to be organised with the SEPA transaction as the first or the last part. So this can now be done with the One-Leg Out (OLO) Instant Credit Transfer (OCT Inst) scheme. Lastly, in March, the schemes all switched over to a newer ISO20022 version.

But there is more: the quality of the EPC deliverables has become so recognised that the EPC received the secretariat of the SEPA Payment Account Access (SPAA). More recently, the industry requested a rulebook for the future Verification Of the Payee (VOP) and I may say that naturally the EPC was the perfect candidate to take on this task.

What do you think about the digital transformation of payments today?

Digitalisation is ineluctable. It is instrumental for the further (r)evolution of payment transactions. Interbank transactions have been fully electronic for ages, but the ISO20022 format gives them more structure and content. What is changing now is the full end-to-end (E2E) digitalisation, providing value to all stakeholders. It allows almost complete automation, enhanced reconciling possibilities both for intermediaries and for beneficiaries thanks to the many reference fields in the messaging formats, and, last but not least, the unaltered transmission of all these data, including the remittance information.

How do you see the European payments landscape evolving in the next five years?

Payment transactions are speeding up: the global trend in payments is shortening the transaction time to real-time where possible. Within the next five years it is not impossible that half – or even more than half – of credit transfers will become real-time. However, many payments will continue to be transmitted by file. Today, it doesn’t make sense to send files with millions of payment transactions in real time. The current technology doesn’t yet allow enough throughput. Unbundling transactions and sending them one by one to the same beneficiary is far slower than sending the whole file directly.

That being said, an impressive evolution is going on. 

Payments transactions today are no longer limited by cut-off times or by bank opening hours. The main change is that payment streams no longer need to be processed in separate time frames from the underlying economic activity. 

They can now be integrated directly within the business process of buying and selling goods and services. In a way, payments will ‘disappear’. The new schemes such as RTP will contribute to this. The buyer will limit his interaction by agreeing on the transaction, the price, and the delivery – and the associated payment will follow automatically. The next step could even be to delegate this to your car (for buying onboard services), to your printer (to buy the ink), or even to your fridge to reorder missing beers, who knows?

However, the real game changer came along with the SCT Inst but still needs to be unlocked. With instant payments, the payer can now choose to make the payment arrive at the beneficiary side when he decides, either within ten seconds or at an agreed time. 

A typical example are salary payments, which can be paid on the first of the month at 7 a.m. in the morning, whichever day of the week it is.

Finally, what are the most amusing or interesting anecdotes you may tell us about your extensive personal experience at the EPC?

It may perhaps not sound so funny but it is quite amusing that even after my departure from the PSMB I can still influence the SEPA schemes a little bit. During my last active year, I was offered the possibility to chair an EPC work block – or you can call it a think tank instead – on how the SEPA schemes could be future-proofed. The final report was delivered just in time before my retirement, and let’s hope the next generation will grab some useful ideas to let the SEPA schemes further evolve.